Which one of the following accounts is debited at the time of payment of tax deducted at source?

Correct option is D

When a company deducts TDS from payments such as interest, salary, or commission, it creates a liability because the deducted amount must be deposited with the government. At the time of deduction, the company credits TDS Payable Account and debits the relevant expense account.
However, when the company actually pays this TDS to the government, the liability must be settled. Therefore, the correct entry is:
TDS Account (or TDS Payable A/c) Dr.   To Bank Account
Thus, the Tax Deducted at Source Account is debited at the time of payment because the liability is being extinguished. This makes option (d) the correct answer.
Information Booster
1. TDS is recorded as a current liability until it is deposited with the government.
2. Payment of TDS must be done within prescribed dates (usually the 7th of the following month).
3. Failure to deposit TDS on time leads to interest and penalties.
4. TDS deducted is reflected in Form 26AS of the deductee.
5. TDS deposit entries reduce liability and bank balance simultaneously.
Additional Information
· (a) Debenture Holders Account: Incorrect; this account is involved in interest payments to debenture holders, not TDS payment.
· (b) Debentures Account: Incorrect; this account is related to capital funds of the company, not TDS compliance.
· (c) Bank Account: Incorrect; the Bank Account is credited, not debited, because TDS payment decreases bank balance.